Humans are appreciating and flexible assets, says Korn Ferry's Malcolm Pannell

Malcolm is an engineer turned HR practitioner who is intrigued by the science of maximising human potential.

“I am an engineer working in HR, " says Malcolm Pannell, who heads up Korn Ferry South Africa. He is extremely passionate about the impact of people in organisations. Having begun his career in construction and manufacturing, Malcolm gravitated towards human resources as he learned that people, more than technology, are the key to driving productivity in any business. 

"A human is a different kind of asset to any other,” says Malcolm. “Any other class of asset, save for maybe property or financial instruments, depreciates over time. If you buy a car, it loses 20 percent of its value as soon as you drive it off the showroom floor. It's the same with technology, plant and equipment.”

"People, by contrast, are appreciating assets, with value-adding benefits. A human asset increases in value over time. The more 'use' or experience it has the more learning takes place and the more valuable it becomes. Furthermore, if you buy a piece of equipment, it does something very specific. Even if it's a highly enabled piece of artificial intelligence with robotics, there will always be a limit to what it can do. Humans though have an extraordinary flexibility. Not only that but, when properly motivated and rewarded, individuals have an ability to dramatically increase their capacity and level of output, particularly in knowledge-intensive work.”

Malcolm has two engineering degrees and started his early working years in construction, where he used time-lapse photography and various other techniques to improve productivity. It was work that intrigued him.

"A construction site is a mobile factory and a very challenging environment in which to optimise productivity.  Whereas with most manufacturing processes, it is the product that moves and the factory remains static,” Malcolm explains. “In construction, it is the reverse and you have very short time frames in which to become productive. A plant that will stand for over 20 years has a much longer timeframe in which to recoup the investment," says Malcolm, who, after his stint in construction, started his own productivity business before eventually joining The Hay Group as a consultant.

Maximising the human resource 

Most of his time there was spent doing work on the people-organisation interface. As much as he believes in the work that they do, Malcolm is not an industrial psychologist by any stretch of the imagination. Rather, his area of expertise is about how to get an organisation, as a whole, to be highly productive by designing effective jobs and creating structures that maximise efficiency. 

He says making employees effective requires a very unique thought process, centred on managing intangible assets. While finance people learn to manage the currency of business and engineers become masters of technology, for example, their early career success is often not based on managing people. Malcolm believes in an approach that uses the right mix of “hard and soft dimensions” to mould the culture of the organisation and to get people engaged and productive in the workplace.

Culture also plays a key role in establishing a sense of belonging and appreciation. A corporate culture that promotes openness, collaboration, communication, an easy flow and acceptance of ideas, and strong ethics go a long way in making employees feel like staying in the environment.  The bottom line is, the longer you retain productive human assets the greater value an organisation can create.

Finally, Malcolm believes that effective leadership, at an individual, team and organisation wide level, inspires increased engagement and superior performance from good employees. 

On the need for consultants

Recent events in South Africa have brought into question the role of consultants and their ability to add value. A common criticism is that their input doesn't have a tangible impact on the organisations they serve or that they are brought in for work that could be done just as effectively in-house. Malcolm acknowledges that “while this appears to be the case particularly in certain government departments and state-owned enterprises, the value of thought leadership based consultants is fundamental to global competitiveness”.

This is because sharing knowledge and learning is probably the most cost-effective investment available. Know-how that is transferred is still possessed by the source and available for further deployment. Conversely consultants who “do the work on behalf of internal resources and do not leave a learning behind” are not delivering true value and reduce the ROI.  

Although many large corporations might have the internal capacity to find new solutions, they often don't because of an insulated perspective.  The nature of the work done by consultants allows them to deal with a variety of businesses throughout different industries, bringing all that experience to the table when dealing with a specific problem.

Says Malcolm:

"I don't think there has ever been a client that I haven't learnt something from. And the point of being a consultant is to be able to bring the collective knowledge gained from working with so many different organisations to bear on each new situation.”

Furthermore, "A prophet in his own land is seldom heard, so using external people can have a catalytic effect. You also have to realise that organisations need to choose their differentiating focus and simply cannot be thought leaders in every aspect of their business. To a large extent, most people in business have a full-time job to do and  it is often difficult being the change agent while you're busy executing part of the puzzle." 

He concludes, “Korn Ferry has been in business for 75 or so years and has dealt with some of the most remarkable organisations around the world, and we learn a hell of a lot through doing that work. It is the most fascinating and rewarding career. ”